Economic Goods

Common goods and public goods both fall under the area of non-exclusivity; which means people cannot be restricted from consuming the goods in question, and they are not being paid for. The difference is that common goods are a form of rival goods and public goods are not. Rival goods are the type of commodities and resources which, while being consumed, decreases the size of consumption another person has of partaking in it. One example of a common good would be nature and the public beach. People cannot be hindered by others to swim in the ocean or lie beside the shore, but too many people swimming in the ocean and crowding the sands decreases the chance of another to experience its vastness. Conversely, public goods are the opposite because although non-exclusive, they are considered non-rival. A popular example of this type of good is that the air around us, since nobody can be deprived of breathing it, but one person’s breathing or ‘consumption’ of the air does not diminish the instance of another to feel and breath it.

Private goods and natural monopolies on the other hand, are unlike both public and common goods because they are considered exclusive goods; meaning there is a significant chance of limiting its consumption because they are being paid for. The difference lies mainly in one being rival and the other as not. Private goods are rival goods, an example would be merchandise such as shoes and clothes, its consumption is limited by how much is produced and how many people buy them. Natural monopolies are non-rival, and such can exemplified in the internet for instance, since not everybody has computers and given access to the internet, but once they do, one person’s use of the internet does nothing to diminish another person’s consumption of its service.

Externalities are cases in which goods fail to do well in their respective markets, and an intervention is employed. An example of this would be the assignment of fees. Most externalities are seen as good for the economy because taxes for example, are used on varied aspects of development, but people on the receiving end of the charges, aren’t as delighted.